Friday 1 November 2002 11.16 EST
First published on Friday 1 November 2002 11.16 EST

I want to tell you about all that has gone well in the new South Africa over the past decade, but I can't shake off this haunting figure of 35,000. I want to tell you about the ordinary heroes who cracked open the shackles of four decades of apartheid to lay a bedrock for a greater society; of the black people who set aside a lifetime of abuse and pain to invest in a new country alongside their oppressors; of poor Afrikaners who found the courage to vote to end to white rule; of the millions of South African parents, far outnumbering the purveyors of crime and violence, who struggle to shape a future for their children free from the old dictum that they are good only for the factories or the fields.

But this figure of 35,000 has produced fresher, if unlikely, heroes who are also struggling to ensure that South Africa lives up to the hopes unleashed on the day Nelson Mandela walked free in 1990. For 35,000 is the number of children estimated to have been born infected with HIV last year because President Thabo Mbeki said they could not have the single shot of a drug that could have saved their lives for just a few pence.

As things stand, the vast majority will die within a very few years in great pain and distress. It's emotive, I know, to dwell on the fate of these children and to point the finger directly at Mbeki. But there is as much at stake as the Aids pandemic takes hold as when South Africa emerged from the dark days of apartheid a decade ago, and the consequences of the looming devastation have the potential to undo much of what has been fought for. Two million children will be orphaned before the end of this decade. Life expectancy will collapse to just 41 years. Millions will be driven deeper into poverty. What does Mbeki's grand vision of Africa's renaissance mean when he is prepared to stand idly by while six million people in his country are going to die of Aids by 2010, unless there's a medical breakthrough?

If you think this is an overly pessimistic view (Mbeki's former spokesman once described me as "colonialist" for doubting his master's leadership) then consider that Desmond Tutu has compared the social devastation of Aids to apartheid. His successor as Anglican archbishop of Cape Town, Njongonkulu Ndungane, went further and described the government's Aids policies as "as serious a crime against humanity as apartheid".

Mbeki's discarding of the welfare of the people who put him into power has even prompted Mandela to wade back into politics in defence of the poor and the powerless. Mbeki's response has been to snub the greatest of South Africa's leaders. One of the country's leading Aids researchers - Malegapuru Makgoba, who happens to be black and formerly one of Mbeki's confidants - told me that the government's inaction is tantamount to genocide. He has said it publicly and he is not alone. Genocide is a word too easily bandied about these days. But it seems sadly appropriate to describe the policies of a man so indifferent to human life, so lacking in compassion, that neither the suffering of 35,000 children nor the prospect of millions dying can move him to set aside his prejudices and use his considerable powers to save those that can be saved and prevent others succumbing to the pandemic.

Instead, for all the assurances that Mbeki has moderated his views and the incremental policy changes wrung from the government by popular disgust and the courts, the president of South Africa still resists setting an example by taking an HIV test or telling men that it is wise to wear a condom. No wonder schoolchildren call him "Comrade Undertaker".

All this is a far cry from the day in April 1994 when I watched Mandela cast the first vote in South Africa's first all-race election at a small rural school near Durban. It seemed to me that no individual had ever cast a more important ballot. It represented not only the liberation of a people but offered a rare moment when hope really did triumph. There weren't too many illusions about the difficulties ahead, but they were subordinated to the thrill that South Africa could live up to the promise of Desmond Tutu's Rainbow Nation.

The country was imbued with a vigour, a belief that it was a blessed nation. In many ways, South Africa has lived up to those hopes. Liberation has brought a flowering of music and culture, imbued many young black people with a self-confidence few of their parents knew, and nailed the old lies about racial superiority. Racism still courses through South Africa's veins - and not just among non-blacks - but there is generally shame among whites at apartheid. Just try to find anyone who admits to having voted for it.

Mbeki came to power three years ago amid an immense amount of goodwill. Mandela had saved the country from itself with his message of reconciliation and non-discrimination, but he was not a good administrator. Mbeki was heralded as the manager who would bring order to well-intentioned disarray. It took less than a year for that goodwill to vanish, and Aids had a lot to do with it.

Whether you find Mbeki's Aids polices merely disturbing or something more sinister depends on what you believe motivates South Africa's president. There are those who see his stance on Aids as an aberration in an otherwise fine leader. British diplomats and Financial Times writers view his adherence to the strictures of modern economic doctrine as evidence of his soundness of mind. They are in unusual alliance with some of those who picketed South Africa house in Trafalgar Square two decades ago and who can't quite believe the liberation is being led dangerously astray.

There is an alternative view of Mbeki - one that is gaining ground in South Africa, particularly among those who fought to end apartheid. It is that, far from being an aberration, Mbeki's views on Aids - and, more importantly, the methods he uses to impose them and deal with those who disagree - are central to his character and style of governance. And they are a threat to South Africa's fledgling freedoms. For while Mbeki has shed his belief in socialist economics, he has clung dearly to the methods of political control he was schooled in during his years on the central committee of South Africa's communist party. Bound up with this is Mbeki's own obsession with race. Clearly it plays a part in his views on Aids - as he made clear in an extraordinary speech a year ago in which he accused those with a more conventional view of the disease of denigrating black people as vice-ridden germ carriers unable to control their lust, and black people who agree with them as "negroes of enslaved minds".

Mbeki may well believe all this, but why does he lie so consistently in defence of his views? He misrepresented World Health Organisation statistics to parliament in an attempt to claim that Aids accounts for only a small proportion of deaths in Africa. He argued for a cut in his own government's Aids budget with false figures. He told the BBC that murder is a bigger killer in South Africa than Aids. It was just one of many lies. Through it all, Mbeki said he was merely seeking an open debate, but those who disagreed with the president found he isn't seeking answers at all. When the medical research council (MRC) predicted nearly 800,000 deaths a year in South Africa from Aids by the end of this decade, the president's chief enforcer, Essop Pahad, implied the researchers were working for multinational drug companies.

Pahad's office launched a campaign to pressure and vilify the MRC's president, Malegapuru Makgoba, by accusing him of playing into the hands of white racists who wish to portray Africans as "inherently and intrinsically diseased". The ANC distributed a fat document which claimed anti-HIV drugs are an attempt to commit genocide against black people and another that compared anti-retrovirals to "the biological warfare of the apartheid era". White researchers were singled out and vilified as racists and little short of murderers. Mbeki even told his party that the CIA was scheming with American drug companies to discredit him over Aids because he is challenging the world economic order. South Africa's president is welcome in Downing street and the White House precisely because he so closely adheres to the prevailing economic orthodoxy.

The official opposition is weak, ineffective and largely without credibility among blacks after running a racist presidential campaign. It has fallen to others to keep the flame of democratic accountability burning in South Africa. A small groups of Aids activists, the Treatment Action Campaign (TAC), has done more than most to force Mbeki's administration to face up to the basic moral responsibilities to the people it governs.

The Tac's great victory was in dragging the government to the constitutional court to force it to provide the drugs that can save the lives of the 35,000 babies. The South African paediatric association says about 70,000 babies are born with HIV each year and that that number can be halved with the administering of a single dose of a very cheap drug, nevirapine, to mother and child at birth. Mbeki threw up a myriad of objections from unfounded concerns about toxicity and resistance (there's no such danger in a single dose) to the lack of infrastructure in some rural areas to provide HIV-positive mothers with bottles and formula as an alternative to breast-feeding (which is a little like saying that if you can't get an ambulance to the middle of rural Transkei there should be none in Johannesburg).

But there were other, more cynical, considerations at work. Mbeki's former spokesman, Parks Mankahlana, offered the shocking view that saving babies lives would only contribute to the orphan crisis because their mothers will die anyway. "A country like ours has to deal with that," Mankahlana told Science magazine in the US. "That mother is going to die, and that HIV-negative child will be an orphan. That child must be brought up. Who's going to bring the child up? It's the state, the state. That's resources, you see?" Never mind that the government is able to afford £4bn on importing weapons. Mankahlana has since died of Aids, although Mbeki says it was anti-retroviral drugs that poisoned him to death.

The Tac won a ruling that is mind-boggling in its implications. Essentially, the court offered the damning judgment that Mbeki's government was failing in its primary constitutional duty to protect lives. The ANC leadership's response has inevitably been to stall implementation of the court's ruling, and to rubbish the Tac. Its leader, Zackie Achmat, has HIV and is refusing to take the drugs that could save his life while they are not available in public hospitals. Mbeki's henchmen stooped so low as to accuse the Tac leader of faking his HIV status. That did not stop Mandela from making a high-profile visit to Achmat a few weeks ago and implicitly endorsing the Tac campaign.

The court victory was more than the single greatest defeat for Mbeki's government. The campaign for a humane and decent policy on Aids has opened the way to the legitimate criticism of the liberation movement and revived the activism of the 80s over a host of issues, from land rights to the prevailing emphasis on the pursuit of wealth. Until recently, there was a sense among those who had struggled so hard for liberation that criticism of the ruling party played into the hands of the old order, that it bordered on betrayal. But the bulk of those afflicted by Aids are poor and black. Try as Mbeki might, the accusations against those who oppose him and the party leadership on HIV simply don't wash. The growing public disquiet over the government's Aids strategy from within the unions and among those who once campaigned against apartheid has opened the door to the questioning of other policies - not least on the economy.

Mbeki has attempted to muddy the waters about Aids by claiming that poverty is as much a cause as HIV. Undernourishment, unsanitary living conditions and lack of proper medical care do indeed contribute to the speed with which the disease takes hold. But the idea that poverty, not the virus, causes Aids is nonsense. None the less, for the moment, let's take Mbeki's claim at face value. If poverty is at the root of the Aids pandemic, then it might be expected that alleviating the dreadful circumstances in which so many South Africans live would take precedence over all else. The statistics tell a different story.

In 1994, when the ANC came to power, the World Bank characterised South Africa as a country marred by "destitution among plenty". Eight years later, South Africa continues to vie with Brazil for the country with the greatest inequality of income distribution. The poorest 10% of South Africa's population share a smaller slice of the pie than at the demise of apartheid, while jobs are harder to come by than at any time for decades. South Africans were shocked to learn earlier this month that children still starve to death in the eastern Cape and KwaZulu-Natal.

Shortly before he became president, Mbeki described to parliament how South Africa was two nations - one white, the other black; one rich with every opportunity laid before it, the other poor with only a theoretical equality in the constitution, but in practice denied the opportunity for advancement. Four years later, Mbeki still oversees two nations in South Africa but now they are divided by class. Whites command a smaller share of the pie but the benefits have not been generally distributed among the bulk of South Africans. Instead, a new elite is being moulded with the implicit message that racial equality means the right of a select few blacks to become as rich as the white minority, with a lifestyle far more extravagant than the country can afford.

Mbeki projects himself as an African nationalist, a leader fighting for his continent against the forces of neo-colonialism, racism and Afro-pessimism; a man prepared to tell truths other leaders shy away from. Yet he has fully embraced the latest ideology from the west. Whatever the merits or otherwise of Thatcherism and its offshoots in Europe and America, Africans are discovering from bitter experience that they do not necessarily contain universal truths. The implicit message that the meaning of life is to make money and that self-enrichment as a social service is disturbingly out of place in post-apartheid South Africa. Even where there have been significant steps to alleviate poverty, they are tempered by the government's policies.

Millions of the desperately poor who used to plunder electricity have legal access for the first time. But it is deemed that costs have to be recouped through increased charges, so thousands are cut off for non-payment. When the government found itself with a budget surplus on its hands earlier this year it did not direct the money toward alleviating poverty. Instead it gave a large tax rebate to the better-off. All of this is aimed at a presenting a sound economy to the outside world in a bid to attract precious foreign investment that, the true believers assured us, would "catapult" South Africa onto the path of rapid economic growth and the prospect of a glorious future as the South Korea of this continent.

Yet foreign direct investment still accounts for less than 1% of GDP, and the bulk of that goes to speculative ventures that create few jobs and allow the rapid withdrawal of funds. Nearly half of all black people are unemployed. Jobs are being created but not at a rate fast enough to keep pace even with the numbers of young people leaving school. One problem remains a fundamental lack of foreign confidence in South Africa. The cause of some of it, such as crime, is hardly the government's fault. But Mbeki has contributed to the doubts through his equivocation on Zimbabwe, and Aids. Those who defend him because of his "sound" economic policies ignore the impact that his views on Aids have probably played in undermining the South African economy and in compounding poverty. The World Bank estimates that by the end of this decade, Aids and its consequences will consume 19% of South Africa's GDP. That will make it even more difficult for the government to afford the drugs to contain the pandemic.

Periodically, Mbeki's cabinet announces a shift in Aids policy dressed up as a fundamental rethink, the latest last month. The government says it is working on the "cost implications" of providing anti-retroviral drugs, something you might imagine it would have explored long ago. The same can be said about the declaration that it has started training doctors and nurses in HIV care.

Revealingly, the new initiatives to tackle the greatest threat to South Africa's security, economy and welfare never come from the president himself. That is because they are only ever made under duress from public opinion or the courts. Perhaps Mbeki's government is finally sincere in promising to face up to its responsibilities to those with HIV. But actions are a better guide than cabinet statements. Months after the constitutional court ordered public hospitals to distribute nevirapine to all HIV-positive pregnant women who want it, the government is still inventing obstacles to the wide distribution of the drug that can save the next 35,000 babies.

· Chris McGreal covered South Africa from 1990 to 2002. This is his final dispatch. He is now the Guardian's Jerusalem correspondent.